ALIGN TECHNOLOGY, INC. (ALGN): what the price assumes

In the published model solve dated 2026-Q2, anchored at $157.58, ALIGN TECHNOLOGY, INC. (ALGN) is priced for today's economics sustained for ~7.7 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/ALGN

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 12.6% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Align earns about four dollars in five from Invisalign clear aligners, and the engine of that business has quietly changed: shipments keep setting records while revenue per case fell by 3.9% from $1,295 in 2024 to $1,245 in 2025, so growth now comes from selling more, not from selling dearer.
• Today's price carries about 20 times company-wide operating income and needs close to nine more years of compounding at the quickest pace the business can fund from its own cash, set against a trailing operating margin of 13.2%.
• The next real read is July 29, 2026, when second-quarter results land against a company outlook of 3% to 4% revenue growth for the full year and mid-single-digit case volume growth.

Bull Case

The direction of travel is better than the headline growth rate suggests. First-quarter 2026 revenue came in at $1,040.1 million, up 6.2%, on record Invisalign shipments of 685,700 cases, up 6.7%, with double-digit volume growth across EMEA, APAC and Latin America. More useful than the top line is what happened underneath it. The latest quarterly filing reports that in the clear aligner business our operating margin increased compared to the same period in 2025, primarily due to higher gross margin and lower advertising and marketing spend. Selling more cases while spending less to sell them is the shape a maturing consumer-medical franchise is supposed to take.

The reason it can do that is the installed base of scanners sitting in dental practices. The Systems and Services business, which the company describes as sales tied to our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, scanner wand upgrades, is only a fifth of revenue, but it is the on-ramp. A practice that has bought the scanner has already digitized the workflow that ends in an aligner order. Align's stated plan leans directly on that: Increasing global orthodontic utilization rates as doctors' clinical confidence in the efficacy and predictability of the Invisalign System grows is the growth lever it names first, and utilization is a per-doctor variable, not a per-patient one. Each incremental case from an existing account costs almost nothing to win.

There is also more runway inside the existing clinical indication than the mature label implies. The company notes that the Invisalign System with mandibular advancement targets Class II cases, which it puts at approximately 30%-45% of malocclusions globally. Aligners took the easy adult cosmetic cases first. The harder growth, teens and complex corrections, is where the clinical work of the last few years has been aimed, and it is a much larger pool than the one already converted.

Set against the medical-device names it is grouped with, the profitability is respectable rather than exceptional, and the comparison that matters is the dental one. Dentsply Sirona (XRAY), the incumbent in dental equipment, ran a negative 14.1% operating margin on revenue that shrank 1.0%, and Envista (NVST), which sells the competing Spark aligner, converts 8.5% of revenue into operating profit on 12.1% growth. Align's 13.2% trailing operating margin, earned while its two closest dental comparables struggle to convert at all, is evidence that the aligner franchise still holds its pricing better than the category around it.

Capital allocation is the quiet part of the case. The company carries no funded borrowings and is not consuming cash, which means every dollar of repurchase comes out of operations rather than the balance sheet. The 10-K records that the board authorized a plan to repurchase up to $1.0 billion of our common stock in April 2025 and that We repurchased $466 million during the year ended 2025, with a further $200 million announced alongside the first-quarter print. The share count has fallen about 2.5% a year over the past four years. Buying back stock while the case count grows is the least glamorous way to compound, and it works.

Bear Case

Tariffs are not a footnote for a company that builds its product on several continents and ships it into a third. Align manufactures cases including in Costa Rica, China, Germany, Spain, Poland, and Japan, which is efficient until a border becomes expensive. The company states the exposure plainly: it may not be able to fully or substantially mitigate the impact of any new or increased tariffs or pass price increases on to our customers and to the extent we do, we may experience reduced demand for our products. That is a two-sided trap. Absorb the cost and the margin goes; pass it on and the volume goes.

The demand side is more discretionary than the healthcare label suggests. An orthodontic course is an elective purchase that a household can postpone for a year without consequence, and the filing concedes that utilization will fluctuate from period to period due to a variety of factors, which may include seasonal trends in our business, consumer demand due to macroeconomic factors, and adoption rates for new products and features. Elective spending is the first line item cut when rates or unemployment move the wrong way, and the doctor placing the order feels it a quarter before Align does.

Price is already moving in the unhelpful direction. Revenue per aligner case fell by 3.9% from $1,295 in 2024 to $1,245 in 2025, so record shipments are partly compensating for a slipping unit economic rather than sitting on top of a stable one. Competition explains why. Beyond the traditional wire-and-bracket alternative, the company names DTC companies that provide clear aligners using a business model requiring little to no in-office care from trained and licensed doctors, and doctors and DSOs who manufacture custom aligners or procure products from third-party white-label providers. White-label supply is the specific threat to price, because it lets a large dental group keep the patient relationship and shop the manufacturing.

Now put that against what the quote requires. At $166.80 the market carries Align at roughly 20 times company-wide operating income, and getting to that number takes operating profit compounding at the quickest rate the business can fund from its own cash for roughly 8.7 more years. Of the comparable fast-growers used as the reference, only about 17% were still running at that pace that far out. Meanwhile management's own outlook for this year is revenue growth of 3% to 4% with volumes up mid-single digits. The gap between a low-single-digit revenue plan and a near-decade of high-rate compounding is the bear case in one line, and the sensitivity is unforgiving: each percentage point of growth that does not show up stretches the required horizon by roughly 1.9 years.

The balance sheet blunts the downside without answering the question. Align carries no funded borrowings, is not burning cash, and has been retiring shares rather than issuing them, so a soft patch is survivable in a way it would not be for a levered peer. But solvency was never the risk here. The risk is that a mature franchise with slipping per-case revenue, tariff-exposed manufacturing and a discretionary end customer gets valued as though the next nine years look like the last nine, and the earnings-power lens, which capitalizes what the company earns today and credits no growth whatever, already lands well below the current quote.

Valuation

What today's price asks for is time. At $166.80 the market carries Align at about 20 times company-wide operating income, and the arithmetic behind that multiple needs operating profit to keep compounding at the fastest rate the company can fund from its own cash for roughly 8.7 years. The computation runs at a 12.6% cost of capital. The rate itself is inside what Align has delivered before; the length is the demand. Of the fast-growers used as the reference, about 17% of them were still running at that clip nearly nine years on.

The lenses disagree, and where they disagree is the useful part. Judged on what other healthcare businesses fetch per dollar of sales or of cash earnings, Align is unremarkable, and those lenses land at or a little above the current quote. Judged on what Align itself earns, the picture inverts. Capitalizing a five-year average of operating income at a 9.1% cost of capital, crediting no growth whatever, reaches well below where the shares trade. Book-value approaches reach less still. Read together, the pattern describes a company whose sector multiple looks ordinary and whose own standing earnings stream does not support the quote, which is another way of saying the premium here is entirely about growth continuing rather than about profits already banked.

The concrete version of the requirement is arithmetic any practice owner would recognize. Revenue per aligner case fell by 3.9% from $1,295 in 2024 to $1,245 in 2025 while case volume set records. To keep operating profit growing at the pace the quote assumes, Align has to add enough cases each year to outrun a per-case revenue line that is drifting down, and it has to do so from a trailing operating margin of 13.2%. Management's outlook for the current year is revenue growth of 3% to 4%. Those two facts sit at opposite ends of the same page.

Cohort position sharpens rather than settles it. ResMed (RMD) converts 34.2% of revenue into operating profit and Stryker (SYK) 19.7%, so Align's 13.2% is mid-pack among the device names it is grouped with, well ahead of Envista (NVST) at 8.5% and Dentsply Sirona (XRAY) at negative 14.1%. On growth the ranking flips: LivaNova (LIVN) at 12.4% and Envista at 12.1% both run ahead of what Align has guided for this year. Measured on operating income rather than on sales, the multiple the price implies sits at the top of that comparable set, which is the same observation the no-growth earnings lens makes from the other direction.

The balance sheet is not part of the argument, and for a company at this multiple that is worth saying out loud. Align carries no funded borrowings, funds itself from operations, and has been shrinking the share count by about 2.5% a year over the past four years. The 10-K records that the board authorized a plan to repurchase up to $1.0 billion of our common stock in April 2025, with $831.2 million remaining available for repurchase at the close of that year. What that buys is the ability to sit through a weak stretch without dilution. What it does not buy is the case count, and the case count is the variable the price is actually underwriting.

Catalysts

The near-term calendar is short. Align reports second-quarter 2026 results after the close on Wednesday, July 29, 2026, with a call the same afternoon. Management guided the quarter to revenue of $1.04 billion to $1.06 billion and said volumes should rise both sequentially and against the year-ago quarter.

The quarter it follows was stronger on volume than on realized value per case. Revenue was $1,040.1 million, up 6.2%, clear aligner revenue $856.0 million, up 7.4%, and shipments reached a record 685,700 cases, up 6.7%, with double-digit growth in EMEA, APAC and Latin America and a stable North America. Shipments to orthodontists rose 7.4% and to general-practice dentists 5.6%; Align reaffirmed a full-year 2026 outlook of 3% to 4% revenue growth with mid-single-digit case volume growth, and announced a further $200 million of repurchases.

Three things in the print will move the story more than the revenue line. Whether North America returns to growth rather than stability, since that is the market where per-case revenue is under the most competitive pressure. Whether the clear aligner operating margin keeps improving on lower advertising spend, which is what made the first quarter look better underneath than on top. And whether management's tariff commentary changes, because manufacturing spread across Costa Rica, China and central Europe means trade policy reaches the cost line before it reaches the demand line.

Peer Cohorts (Per Segment, With Filing Citations)

Clear Aligner / Systems and Services (reported)

• NVST (ENVISTA HOLDINGS CORPORATION)
• FY2025 10-K: …clear aligners, digital orthodontic treatments, retainers, and other orthodontic laboratory products, and are marketed under the Ormco TM , Damon TM , Insignia TM , AOA TM , and Spark TM brands. We also offer a comprehensive education system to train our clinical customers on the use of our products to address the…
• FY2025 10-K: …Additionally, the Company continually reviews and updates its usage rate, which is the number of times a clear aligner customer is expected to order additional aligners after the initial aligner shipment, along with other related assumptions associated with its clear aligner treatment plan contracts. Changes to…
• XRAY (DENTSPLY SIRONA Inc.)
• FY2025 10-K: …and differ from the Company's projections and market demand, resulting in the Company's forecast of future results being different than expected. There can be no assurance that the Company's distributors and customers will maintain levels of inventory or patterns of build and liquidation timing in accordance with the…
• FY2025 10-K: …related litigation could distract management and entail risks and uncertainties, the outcome of which could adversely affect our results of operations and our reputation. For further information regarding the German Tax Investigation, see Note 21, Commitments and Contingencies, in the Notes to Consolidated Financial…
• MMSI (MERIT MEDICAL SYSTEMS INC)
• FY2025 10-K: …for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant…
• FY2025 10-K: …disorders; ● EsophyX® Z+ system for minimally invasive non-pharmacological treatment of gastroesophageal reflux disease; 7 Table of Contents ● Alimaxx-ES™ and EndoMAXX® Fully Covered Esophageal Stents for maintaining esophageal luminal patency in certain esophageal strictures; ● BIG60® and BIG60 ALPHA® Inflation…
• SYK (STRYKER CORP)
• FY2025 10-K: #9746; No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth…
• FY2025 10-K: -gaap:ForeignExchangeContractMember us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NetInvestmentHedgingMember 2025-12-31 0000310764 us-gaap:ForeignExchangeContractMember us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:NondesignatedMember 2025-12-31 0000310764…
• RMD (ResMed Inc.)
• FY2025 10-K: …us-gaap:SecuredOvernightFinancingRateSofrMember srt:MaximumMember 2022-06-29 2022-06-29 0000943819 rmd:TermLoanCreditAgreementMember us-gaap:BaseRateMember srt:MinimumMember 2022-06-29 2022-06-29 0000943819 rmd:TermLoanCreditAgreementMember us-gaap:BaseRateMember srt:MaximumMember 2022-06-29 2022-06-29 0000943819…
• FY2025 10-K: ___ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x Indicate by check mark whether the registrant (1) has…
• ZBH (ZIMMER BIOMET HOLDINGS, INC.)
• FY2025 10-K: -gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember 2025-12-31 0001136869 zbh:OnePointFiveSixZeroPercentageMember zbh:SwissNoteMember zbh:TwoThousandThirtyFiveMember 2025-09-04 0001136869 zbh:TwoThousandNineteenRestructuringPlanMember…
• FY2025 10-K: …2021-12-31 0001136869 us-gaap:NonUsMember 2024-01-01 2024-12-31 0001136869 us-gaap:InProcessResearchAndDevelopmentMember zbh:Paragon28Member 2025-12-31 0001136869 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:ForeignExchangeForwardMember…
• LIVN (LivaNova PLC)
• FY2025 10-K: …™ , TandemHeart ™ , TandemLung ™ , ProtekDuo ™ , LifeSPARC ™ , ALung ™ , Hemolung ™ , Respiratory Dialysis ™ , and ActivMix ™ . • Trademarks for LivaNova's obstructive sleep apnea system: ImThera ™ , aura6000 ™ , and PolySync ™ . These trademarks and trade names are the property of LivaNova or the property of…
• FY2025 10-K: …us-gaap:SeniorNotesMember 2025-01-01 2025-12-31 0001639691 livn:A2029NotesMember us-gaap:SeniorNotesMember 2024-03-08 2024-03-08 0001639691 livn:A2025NotesMember us-gaap:SeniorNotesMember 2020-06-17 0001639691 livn:A2025NotesMember us-gaap:SeniorNotesMember 2020-06-17 2020-06-17 0001639691 livn:A2025NotesMember…
• HAE (HAEMONETICS CORPORATION)
• FY2025 10-K: CurrentAssetsMember us-gaap:FairValueMeasurementsRecurringMember 2024-03-30 0000313143 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OtherCurrentAssetsMember 2025-03-29 0000313143…
• FY2025 10-K: Loss into Earnings Location in Consolidated Statements of Income and Comprehensive Income Amount of Gain Excluded from Effectiveness Testing Location in Consolidated Statements of Income and Comprehensive Income (In thousands) Designated foreign currency hedge contracts, net of tax $ ( 1,508 ) $ 11 Net revenues, COGS…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.